Boy Scouts of America may file for bankruptcy protection amid sex-abuse lawsuits

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Boy Scouts face bankruptcy; AAA holiday travel forecast

Morning Business Outlook: Boy Scouts of America is reportedly considering bankruptcy filing amid dwindling membership and a number of sexual abuse lawsuits; AAA forecasts that more than one third of Americans will travel this holiday season.

The Boy Scouts of America is considering filing for bankruptcy protection.

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The organization is facing a shrinking membership and escalating legal costs related to lawsuits over how it handled allegations of sex abuse.

Leaders of the Boy Scouts, one of the country’s largest youth organizations, have hired law firm Sidley Austin LLP for assistance with a possible chapter 11 bankruptcy filing, according to the Wall Street Journal.

More than 110 million people have participated in its educational programs, which promote outdoors skills, character-building and leadership, since its founding in 1910.

The Boy Scouts have been at the center of sexual-abuse scandals in the past, and the organization is facing a number of lawsuits that allege inappropriate conduct by employees or volunteers in incidents dating back as far as the 1960s.

Filing for bankruptcy would stop the litigation and would give the nonprofit a chance to negotiate with those who have sued.

Other organizations facing similar legal pressure have also turned to bankruptcy protection in recent years.

Among them, a number of Catholic dioceses and religious orders have filed for chapter 11 protection to negotiate payouts to thousands of victims.

And last week USA Gymnastics, the governing body for the sport, filed for bankruptcy as it faces lawsuits from decades long sexual abuse by the national team’s former doctor Larry Nassar.

The Boy Scouts released a letter to its employees Wednesday that said it plans to “explore all options available to ensure that the local and national programming of the Boy Scouts of America continues uninterrupted,” according to the Journal.

The organization has made news in recent years as it opened some of its programs to girls and transgender boys.

The Boy Scouts currently have more than 2.3 million youth members.

The Church of Jesus Christ of Latter-day Saints, formerly one of the group’s largest sponsors, has said it will withdraw from Boy Scout programs. The church said it would develop its own program for young men.

The Boy Scouts group has drawn scrutiny over its slow pace to become more inclusive, including by lifting a ban in 2015 on gay men and lesbians serving in leadership roles.

The group has also dealt with fallout from its decision last year to expand its recruitment of girls, putting it in competition with the Girl Scouts of the USA.

In recent years, the Boy Scouts group’s legal bills for work done by some outside law firms have grown. In 2017, the organization paid $7.6 million to labor and employment law firm Ogletree Deakins, according to public filings. It paid Ogletree $3.5 million in 2016 and $859,347 in 2015, the filings show.

In the group’s latest annual report, Boy Scout officials said its future financial situation will partly depend on the outcome of sex-abuse-related litigation and future damages awarded.

One lawsuit unfolding in Idaho over alleged abuse by several former leaders is set for a jury trial in May.